Economic Survey 2026 sees steady job gains, Labour Codes in focus as workforce tops 56 crore

New Delhi: Finance Minister Nirmala Sitharaman on Thursday tabled India’s Economic Survey 2025–26 in Parliament ahead of the Union Budget, offering the first official assessment of the economy and labour market conditions.

Traditionally seen as the intellectual scaffolding for the Budget, the Survey sets out the macroeconomic context, policy priorities and risks that frame the government’s fiscal choices in a period marked by slowing global trade and geopolitical uncertainty.

India’s workforce of over 56 crore people represents a major engine for economic growth, the Economic Survey 2025–26 noted, pointing to a labour market that remains steady and resilient. Key indicators show improving labour force participation, declining unemployment and sustained job creation across both the organised and unorganised sectors, reflecting strengthening employment conditions despite global economic headwinds.


India’s labour market is undergoing significant structural transformation, driven by digitalisation, the green energy transition and the rapid expansion of emerging forms of employment such as gig and platform work.

In the post-pandemic growth phase, the policy focus has increasingly shifted from the quantity of jobs to the quality of work, reflecting a more inclusive and sustainable vision of employment. Recent government initiatives aimed at promoting labour-intensive sectors and strengthening skill development underscore this renewed emphasis on quality employment and human capital formation.

Significant employment gains in recent years have been supported by tax rationalisation, deregulation, labour reforms implemented by states, and a sustained focus on skill development. Measures such as GST reforms and easing of compliance burdens have contributed to rising labour force participation and employment growth, particularly across industry and services. At the same time, demographic shifts, technological change and evolving industry requirements are reshaping the employment and skilling ecosystem, with gig and platform work emerging as an important source of livelihood.

In this context, the effective implementation of the Labour Codes is expected to play a critical role in supporting formal employment while improving worker security, especially for women and gig workers. The Codes aim to strike a balance between labour market flexibility and workers’ rights, enhancing industry competitiveness while promoting worker welfare. As definitions of work continue to evolve, dynamic labour policies and flexible regulatory frameworks will be essential to ensure employment expansion alongside worker security and well-being.


On the skilling front, the Survey emphasises the need for flexible vocational pathways beginning at the school level. Recent skilling initiatives reflect a shift towards a more modular and labour-market-responsive framework, helping reduce skill mismatches and support employment generation. Targeted skilling programmes for women and youth in high-productivity sectors will be critical for achieving inclusive outcomes and improving workforce quality.

Looking ahead, advancing institutional convergence and a whole-of-government approach will be key to aligning skilling and employment initiatives. The development of an integrated information system that brings together data from e-Shram on unorganised workers, NCS on job vacancies and skill requirements, and SIDH on training opportunities can lay the foundation for a robust digital public infrastructure.

Such integration would enable a sharper focus on industry-driven skilling, strengthen skill–industry linkages and help build a job-ready workforce.

While expanding the quantity of labour remains important, the Survey stresses that improving the quality of the workforce is equally critical, as economic growth depends not only on the size of the labour force but also on its capabilities. Structural barriers to female labour force participation are being addressed through measures such as safe and affordable accommodation, flexible and hybrid work arrangements, and enhanced social security coverage.

There is also a growing focus on expanding income protection and grievance redressal mechanisms for gig and platform workers to safeguard their well-being.